Power: NERC Gives Conditions for Manufacturers’ Offtake of Idle 2,000MW

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Stories By Chineme Okafor in Abuja
The Nigerian Electricity Regulatory Commission (NERC) has indicated it will allow manufacturers in Nigeria under the aegis of Manufacturers Association of Nigeria (MAN) to procure and off take about 2000 megawatts (MW) of idle electricity from the electricity generation companies (Gencos) in the country under the eligible customers’ regulation if they meet certain conditions.

NERC disclosed this in its first quarter 2018 evaluation report of the power market, obtained by THISDAY.
The regulator said it was making good progress with its guidance of processes to allow the manufacturers take up the 2000MW unused capacities from the Gencos, but would only sanction it when MAN withdraws its pending court action against it and other parties in protest of the 2015 tariff.

It also explained that MAN would have to agree to pay outstanding debts owed electricity distribution companies (Discos) on account of the body’s opposition to the tariff.

MAN had instituted a legal action against the regulatory commission in 2015 for reviewing electricity tariff upwards. The association had stated then that the review was inimical to their operations and would only pay the Discos the old rates for power supplied to them.
However, at the enactment of the eligible customers’ regulation which aimed to allow large power users bulk-purchase electricity directly from the Gencos, MAN indicated they would be willing to participate and take up about 2000MW of power that can be generated by the Gencos but not distributed by the Discos whose distribution networks are constrained to do.

The Discos had reportedly kicked against the manufacturers participating in the new regulation but NERC and the ministry of power have rather engaged both parties in mediatory talks on this.
Providing an update of this in the report, NERC stated: “At the instance of the Minister of Power, Works and Housing, Mr. Babatunde Raji Fashola, a stakeholders meeting was held on 14th February 2018 to discuss how the average 2,000MW stranded generation capacity could be evacuated through Eligible Customer (EC) framework.
“In attendance were the MAN, TCN, Discos, Gencos, and NERC among others. At the end of the meeting, a communique was issued highlighting the resolutions passed at the meeting.

“The resolutions included: NERC to follow up on the agreement reached concerning the need to withdraw the pending cases instituted in the law courts by MAN against NERC and other parties; NERC to follow up on the agreement that parties concerned should resort to negotiations and dialogue towards the payment of the outstanding debts owed Discos by MAN.

“NERC further reminded MAN that the implementation of these resolutions is precedent to granting approval for eligible customer status.”
It further explained that to the commission’s knowledge, the parties concerned have reported to the court that they are looking at an out-of-court settlement for which the court had adjourned for 17th May 2018 for report on out-of-court settlement agreement.

On safety in the power market, the report stated that in the first quarter of 2018, NERC received 67 health and safety reports from 29 of its licensees.

It said: “These reports were used for monitoring and evaluation of health and safety performance of licensees in order to ensure that operators keep up to their responsibility of delivering safe electricity services to consumers in line with the Provisions of Section 32 1(e) of the Electric Power Sector Reform Act (2005).

“More specifically, the reports include a total of 19 accidents notification reports. The accident resulted in 23 deaths and 18 injuries of various degrees to both employees of the licensees and the third parties.

“In comparison to the last quarter of 2017, there was a decline in the health and safety performance of the operators in the first quarter of 2018. “The number of deaths and injuries in the first quarter of 2018 increased by eight each from the amount recorded in the last quarter of 2017. In this regard, enforcement actions have commenced on 12 incidences involving various health and safety breaches during the quarter under review.”